ICRA downgrades credit ratings of Fortis Healthcare, 4 arms

Credit ratings of Fortis Healthcare and its four arms have been downgraded by ICRA following disclosure by the healthcare chain about transfer of considerable funds to third parties, which were later classified as promoter entities.

Credit ratings of Fortis Healthcare and its four arms have been downgraded by ICRA following disclosure by the healthcare chain about transfer of considerable funds to third parties, which were later classified as promoter entities.

The four subsidiaries which have been downgraded by ICRA are Fortis Hospitals Ltd, Escorts Heart Institute and Research Centre Ltd, Hiranandani Healthcare Pvt Ltd and Fortis C-Doc Healthcare Ltd, Fortis Healthcare said in a BSE filing.

As per the filing, ICRA downgraded ratings on Fortis' total debt of Rs 1,170 crore under various instruments while keeping them on watch with negative implications.

The material event, ICRA said for such a downgrade was the "recent disclosure by Fortis Healthcare Ltd (FHL) indicating that considerable funds were transferred to third parties, which were later classified as promoter entities and the current outstanding amount towards such entities is Rs 473 crore."

According to ICRA, the long term rating for Rs 250 crore non-convertible debenture programme, Rs 105 crore fund-based limits, and Rs 195 crore term loans has been revised from [ICRA]A+ to [ICRA]A-.

Further, the short-term rating for Rs 600 crore commercial paper programme and Rs 20 crore non-fund-based facilities has been revised from [ICRA]A1+ to [ICRA]A2+, it added.

"The ratings continue to be on watch with negative implications," ICRA said.

As per the ratings agency, its "action takes into account the disclosure about the advances extended by FHL to related parties which in ICRA's views has a significant impact on FHL's credit and liquidity profile".

ICRA also said inordinate delays in releasing results for second quarter of FY2018 constrained its ability to monitor the performance of Fortis Healthcare.